From Mad men to math men: How to be an effective CMO

Chief marketing officers are masters of selling products and ideas to consumers. But selling themselves to the rest of the C-suite, well, that’s another matter.

Businesses now measure every move a CMO makes. If sales slump or the competition gets a win, all eyes turn to the lead marketer. A recent study by Spencer Stuart found that the average tenure of a CMO is just 48 months. That’s well short of the average tenure of a CEO—9.7 years. The CMO chair “is now the hot seat,” says Tom Seclow, partner at Spencer Stuart.

It’s the “digital age” and it’s also the “age of the customer.” Given that CMOs sit at the intersection of digital and customers, more than ever they are charged with innovation and growth. They have to transform themselves and their organizations while reinventing marketing. The explosion of data cuts two ways, says Jeff Nicholson, vice president of product marketing and CRM for Pegasystems. “It demonstrates what’s working in real time, and it allows organizations to target customers based on predictive analytics. This emphasis on data has completely changed the job in recent years. “We’ve moved from the era of the Mad Men, now more into the era of Math Men and Women.”

In addition to figuring out what to do with all this data, the CMO must put an emphasis on creating new customer experiences. And there’s no algorithm for that creative process—at least not yet.

The data explosion

To remain competitive, CMOs must be prepared to take more risks, but the big bets must be calculated based on data. In a 2014 Accenture survey of 581 CMOs, 42% agreed that analytics would be a core competence of marketing within the next five years—because so much is now traceable. “Thanks to the new world of digital engagement, nearly everything is now quantitative and attributable,” Nicholson says. “And this is now what the business is expecting. Brands can finally take calculated risks with new experience and engagement strategies, quickly test out hypotheses for improving the customer journey in a much more controlled manner and immediately understand the impact to outcomes.”

The era of beaming your message to consumers via TV, print and radio campaigns is gone. Digital channels, including mobile apps, the web and social media in addition to emerging channels like Bluetooth beacons and the Internet of Things are the new communication mediums. And, with these, come data trails that allow marketers to craft custom marketing messages.

Analytics and machine learning

A CMO’s ability to wield new digital automation tools like algorithms and machine learning is now a given. “We’ve had algorithms for a long while to help us target our marketing strategies,” Nicholson says. “But in the past, that was a craftsman’s trade.” Now, Nicholson points out, thanks to great advances in modeling automation, CMOs don’t have to understand complex modeling packages and systems to benefit from and make these kinds of insights pervasive across an organization.

“At first glance you might think, ‘if it’s becoming automated then you don’t need people to apply it and understand it,’ but the opposite is true,” Nicholson says. “All this means now is that you can have the bandwidth as a business to apply advanced analytics in more and more places, to solve more and more business problems across the enterprise.” It is this opportunity to make more data-driven decisions that today’s most effective CMOs are embracing.

Creating experiences

In years past, a CMO’s core mission was to make as many people as possible aware of the company’s brand and products. But today, we understand that the customer journey is a succession of experiences; savvy companies have realized that if they can better orchestrate the experiences, they have a greater chance to affect the journey. This is spurring a musical-chairs effect in creative departments. For instance, what used to be known as the head of creative is now becoming the head of experience design. “They’re honing not just content, but actual end experience—and architecting which experiences an individual should optimally receive in certain contextual situations,” Nicholson says.

Overall, Nicholson says he sees marketing functions shifting from core competencies in campaign promotion to a new competency around the client interaction. In some cases, the very roles and job titles are actually changing during this transition. And this is good for consumers.

Digging deep on digital

Nicholson shares that the CMO must understand and speak a new “digital dialect.” The opportunity for digital is not just for digital marketing such as AdTech, but for the digital transformation of the entire consumer experience. This includes mobile apps, social media, web and much more. Even physical retail environments are now becoming digital with the help of the new Bluetooth LE Beacon technology, which is effectively turning stores into a new form of physical web pages. Digital has become pervasive, opening the doors to a whole new world of experiences and opportunities.

How to maximize effectiveness

A modern CMO has to guide brand strategy, manage customer interactions and demonstrate that she’s doing her job with measurable effectiveness. For those in this new “CMO hot seat,” Nicholson offers the following advice:

Be data-driven, but don’t’ strive to be chief data jockey: The influx of data has prompted new titles like chief data officer and data scientist. Nicholson says, “They’re expected to be incredibly data savvy. But they should also be smart enough to know that they need the highly specialized skills of a data scientist.” CMOs must be able to distinguish necessary data and interpret data, but they don’t need to know how to actually build predictive models.

Map ‘moments of disproportionate impact’: Just a few years ago, customer journey mapping was an arcane practice. Recently though, it’s seen a resurgence. Nicholson says marketers should be looking for “moments of disproportionate impact”—areas where consumers can have a significant breakdown in their experience or opportunities to make a dramatic improvement—and then use insights and, where needed, technology to try to address them.

Attach experience to a bottom line metric: Like any other CMO task, Nicholson says that the “experience” needs to be measurable. Beyond advocacy metrics such as Net Promoter Score, efforts to improve the customer experience can often be correlated with other more tangible outcomes that your CEO will find even more compelling, for example, reduced abandoned baskets, higher repeat sales, reduced attrition and greater sales velocity. Such metrics can help further validate the essential role of experience and journey efforts.

Champion innovation: Above all, Nicholson says that CMOs should be agile thinkers who foster a climate of curiosity where change is embraced and the hunt for improvement is never-ending. Indeed, thanks to the new digital economy, nearly every customer-centered industry is now ripe for disruption, with new entrants emerging in every sector. Meanwhile, in a form of “competitive convergence,” consumers are now measuring your brand’s experience not just against other brands in your industry, but against every other experience they’ve had. Accordingly, Nicholson emphasizes that CMOs need to increasingly drive innovation at a much faster pace than ever before, with a new “fail-fast” mentality if they are to outrun their competitors.